I think it would be good for readers to see all important links for news related to Satyam at one place instead of running around in search engines. It would save a lot of effort on your side, so I have created this post for you (reversed the sequence to reflect from bottom to top with top being latest. It would be easier for you to get latest news without scrolling)-
9th Jan 2009
12. No salary for Satyam Employee for 2 months. Officials have denied any layoff but has commented that is cash position is bad. SEBI have summoned Raju at Satyam's corporate office at 4:30 PM.
11. CID has started probe into Satyam fraud after state govt gave a green flag for operation.
10. While it is recession time, things are not too bad if you are a Satyam employee and good in your area. Checkout this news about opportunities for Satyam employees.
9. Satyam's CFO who has put papers, tried to commit suicide. It is really a shame but running off like this is not going to help things. We expect cooperation from these people so that no one else in future could try this scam.
8. SEBI has seized all finance files of Satyam. Investigation has formally started with this step.
7. Infosys has instructed its HR to not hire Satyam employees. I feel sorry about Satyam employees that their association with a bad name is bringing bad time for them. Also this statement from Infosys has been criticised by Satyamites.
6. Top leaders of Satyam, new CEO Ram Mynampati including vertical and regional division heads and HR head, has vowed to stay with company in this crisis. They have committed that they won't resign and will work together to bring it out of crisis.
5. While there is news that Satyam may fire 10,000 employees in Feb, new CEO has assured that Decemeber salary of Employees has been taken care of. Main issue company is facing for its operation is liquidity crunch.
4. Hoping news for investors and traders that Satyam trading will not be suspended in India.
3. KPMG raised doubt on Raju's confession. According to them, it is no a one man show and it could be a larger crime where someone has actually pulled out the money while actual money was with Satyam. If it is true, it could act positive for Satyam as a company.
2. Satyam share plunged to 18.75 while in morning it touched lowe than 12.
1. Satyam has got a major Irish contract. Under the contract, Satyam will drive FETAC’s implementation of Business Process Management (BPM) solutions for its core business processes.
8th Jan 2009
7. Despite all speculations, LIC is not planning to sell its stake in Satyam. It could be a soothing news for Satyam investor or could start worrying LIC investors who are taking ULIP from LIC. Other institutional stakeholders like ICICI, Citigroup,Fidelity etc are evaluating their option and have not made any decision till now while Aberdeen and Swiss Finance has sold their stakes.
6. Ram MynamPati is new CEO of Satyam in place of Raju. He holded a conference on 8th Jan evening to assure investors and clients of Satyam. He also revealed that Satyam's CFO has resigned while resignation is not approved yet, may be as all senior member of company are already out of company.
5. Brokerage firms have stopped coverage on Satyam share and advising new investors to stay away from this stock.
4. Maytas Infra along with other Satyam subsidiaries will be scrutinized for its link with Satyam. It might uncover another fraud. As per recent news (8th Jan, 4:00 PM IST) RC Sinha, chairman and independent director of Maytas Infra has stepped down. Mendu Rammohan Rao, a former director on the board of scam-tainted Satyam Computer Services, has quit as the Dean of the prestigious Indian School of Business in Hyderabad.
3. Law firms Izard Nobel and Vianale & Vianale have filed class action suits in the US on behalf of those who purchased American Depository Receipts (ADRs) of Indian outsourcer Satyam Computer Services.
2. Satyam was listed in New York stock exchange. It halted trading for Satyam in US as well as Amsterdam in Europe. National Stock Excahnge of India has removed Satyam from its Nifty 50-share index. BSE may follow later. Also it could be that Satyam is de-listed from stock exchanges.
1. SEBI announced that it will take strict action against Satyam Chariman for fraud. It even gave hint that it could be removed from Nifty and trading could be stopped for its share.
Till 8th Jan 2009
1. Ruchika Sharma has comiled a very nice list of events along with dates as it unfolded. It is a must start for reading and getting a history feed of what all has happened with Satyam till 8th Jan,2009.
(Plesae help me by leaving comments if you find any good link which should be here)
Thursday, January 8, 2009
Wednesday, January 7, 2009
Fate of Satyam after Raju Resigns
This is today’s shocking and hot news for India. Chairman B. Ramalinga Raju’s admission that Satyam Computer Services Ltd’s Balance Sheet was completely fabricated got the stock
Crashing down by 66.5 per cent to Rs 40 from Wednesday’s high of Rs 188.70 (check here)
Company share hit a lowest of Rs 30, while previous 52 week low was marked at 114, as details of the extent of fraud perpetrated by the promoters shook the stock market.
Not only the prices of own company share but this news has brought down the whole Sensex. The BSE IT Index plunged 7.70 per cent and BSE Realty tumbled 11.20 per cent.
Satyam fraud raised question over corporate governance of other companies also, especially IT. The Satyam fiasco has left a big question mark on corporate governance in India while sending a negative signal to the foreign institutional investors, analysts said. Company was already in news for bad governance over decision to invest in family business and 8 year ban from World Bank. Check my previous post on this topic.
The Satyam story poses a big question over the credibility of auditors in general, as PricewaterhouseCoopers was auditor of the company. The bankers to Satyam included Bank of Baroda, BNP Paribas, ICICI, HDFC, Citi Bank, HSBC.
Chairman’s letter to the company board and SEBI revealed a fraud of unprecedented proportions. Raju stated that Satyam’s balance sheet as on Sep 30, 2008, carries an inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 reflected in the books). Further, it carries an accrued interest of Rs 376 crore which is non-existent. The books carry an understated liability of Rs 1,230 crore on account of funds arranged by Raju, and an over stated debtors position of Rs 490 crore (as against Rs 2,651 crore in the books).
The Securities and Exchange Board of India on Wednesday said it would take all steps under the law for which it has started discussions with government and bourses. As Raju mentioned in his letter that neither he nor managing director have been benefited from this and it is a result of inflated profits company was showing over the past few years (source unknown, and I am not responsible for validity of this statement).
There may not be much impact on the other IT companies, except a bad name in general for Indian corporate and one may see Infosys, Wipro or TCS go up in next trading sessions. Companies in competition of Satyam overseas can look it as opportunity as management will take some time to get hold on company and it may not pursue its growth that aggressively like it was doing before. It can act as advantage for Satyam’s competitors.
Crashing down by 66.5 per cent to Rs 40 from Wednesday’s high of Rs 188.70 (check here)
Company share hit a lowest of Rs 30, while previous 52 week low was marked at 114, as details of the extent of fraud perpetrated by the promoters shook the stock market.
Not only the prices of own company share but this news has brought down the whole Sensex. The BSE IT Index plunged 7.70 per cent and BSE Realty tumbled 11.20 per cent.
Satyam fraud raised question over corporate governance of other companies also, especially IT. The Satyam fiasco has left a big question mark on corporate governance in India while sending a negative signal to the foreign institutional investors, analysts said. Company was already in news for bad governance over decision to invest in family business and 8 year ban from World Bank. Check my previous post on this topic.
The Satyam story poses a big question over the credibility of auditors in general, as PricewaterhouseCoopers was auditor of the company. The bankers to Satyam included Bank of Baroda, BNP Paribas, ICICI, HDFC, Citi Bank, HSBC.
Chairman’s letter to the company board and SEBI revealed a fraud of unprecedented proportions. Raju stated that Satyam’s balance sheet as on Sep 30, 2008, carries an inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 reflected in the books). Further, it carries an accrued interest of Rs 376 crore which is non-existent. The books carry an understated liability of Rs 1,230 crore on account of funds arranged by Raju, and an over stated debtors position of Rs 490 crore (as against Rs 2,651 crore in the books).
The Securities and Exchange Board of India on Wednesday said it would take all steps under the law for which it has started discussions with government and bourses. As Raju mentioned in his letter that neither he nor managing director have been benefited from this and it is a result of inflated profits company was showing over the past few years (source unknown, and I am not responsible for validity of this statement).
There may not be much impact on the other IT companies, except a bad name in general for Indian corporate and one may see Infosys, Wipro or TCS go up in next trading sessions. Companies in competition of Satyam overseas can look it as opportunity as management will take some time to get hold on company and it may not pursue its growth that aggressively like it was doing before. It can act as advantage for Satyam’s competitors.
Monday, January 5, 2009
India IT Future in 2009
Indian IT industry has mature a lot from time when it started in 70s with body shopping. Though it looks a bad term now a days, this was the crude face of today's IT at that time where capable people were offering their services to needful client of US. Today, IT industry not only provide maintenance service and customised solution, but looking forward to partner with client and get involved in strategic thinking for benefit of business. It is just not offshoring anymore.
If things have been good for some more time, we could have seen Infosys, Wipro and other bumping their shoulders with IBM, Accenture for consulting assignment. With economic recession slowing down growth of industry, what should we expect in 2009 for India? Instead of making a blind attempt, it is better to look into few of facts and then devise a plan to battle in this ground. I am hopeful that if you are in software industry, this post will help you organise your thinking and make a better decision.
While 30-40% revenue of Indian IT was coming from BFSI segment, as some of major player of this sector are going down, there will be a big impact on Indian IT firms. Situations ranging from job cut, downsize, slowdown to domain change can occur. While subprime lending could be said a result of mere greed, it is also asking for a better solution in loan and credit area for better governance and long term view. Going forward, it might not be just maintenance, but more money will be pushed for innovation which can help improving core systems. Most of BFSI applications are decade old which are not efficient in fast growing global economy and innovation will be the key for dominating in new era.
Indian IT firms are majorly operation from SEZs. It is planned to end Tax holiday for these companies in 2010 which will shoot expenditure cost for these companies and bring down profit margin by a great extent. While companies are trying to extend it, it would not be good for Indian society to depend on it for long and keep its eye closed on this fact. IT companies need to think of increasing growth and minimizing expenditure at other places then avoiding tax to Indian govt. If all these companies will start giving tax to govt. growth in other sectors could be increased which will help Indian society in general. Be ready to expect some impact of this on your salary in 2010 or 2011.
China is next emerging country for IT services. While it is starting on field where India has matured, its threat should not be ignored for competition. Indian companies have already thought of taking its advantage and major giants like Infosys have opened development centers in China for future time. If it grows, they will be sharing the profit from these locations. Only one thing can keep us ahead in race and that is up-the-ladder services and strategic partnership with client. If we keep working in down the chain in service ladder, China will soon take over and give you a hard time.
Onsite is not the only charm of industry. With many of Indian companies (other than IT) are making their presence globally, it is time to look into domestic market and slot in your position for future. Idea has given a multi year $80 billion contract to IBM for its IT service management. Why not one of our Indian company? Because while we were trying in US for opportunity, an US company bargained domestic work out of India. Reliance, TATA, ICICI and many others are now global companies and should have a lot of need of IT support. These are nowhere less in revenue than any US or Europe company, so don't underestimate our domestic market. Even SBI could give a fight to any international bank for its customer count and money it handles.
And as I started, this is era of automation. Lame coding is outdated in current time. You need to be sensible to client business and provide a solution which could be mapped to a final income. If you are not thinking in that line, you are not growing up and cannot keep up with new race which is going to begin. So sharpen your skill, look for long term opportunity and make your position to be in front when race starts.
Wish you a happy and prosperous future of 2009. Good luck.
If things have been good for some more time, we could have seen Infosys, Wipro and other bumping their shoulders with IBM, Accenture for consulting assignment. With economic recession slowing down growth of industry, what should we expect in 2009 for India? Instead of making a blind attempt, it is better to look into few of facts and then devise a plan to battle in this ground. I am hopeful that if you are in software industry, this post will help you organise your thinking and make a better decision.
While 30-40% revenue of Indian IT was coming from BFSI segment, as some of major player of this sector are going down, there will be a big impact on Indian IT firms. Situations ranging from job cut, downsize, slowdown to domain change can occur. While subprime lending could be said a result of mere greed, it is also asking for a better solution in loan and credit area for better governance and long term view. Going forward, it might not be just maintenance, but more money will be pushed for innovation which can help improving core systems. Most of BFSI applications are decade old which are not efficient in fast growing global economy and innovation will be the key for dominating in new era.
Indian IT firms are majorly operation from SEZs. It is planned to end Tax holiday for these companies in 2010 which will shoot expenditure cost for these companies and bring down profit margin by a great extent. While companies are trying to extend it, it would not be good for Indian society to depend on it for long and keep its eye closed on this fact. IT companies need to think of increasing growth and minimizing expenditure at other places then avoiding tax to Indian govt. If all these companies will start giving tax to govt. growth in other sectors could be increased which will help Indian society in general. Be ready to expect some impact of this on your salary in 2010 or 2011.
China is next emerging country for IT services. While it is starting on field where India has matured, its threat should not be ignored for competition. Indian companies have already thought of taking its advantage and major giants like Infosys have opened development centers in China for future time. If it grows, they will be sharing the profit from these locations. Only one thing can keep us ahead in race and that is up-the-ladder services and strategic partnership with client. If we keep working in down the chain in service ladder, China will soon take over and give you a hard time.
Onsite is not the only charm of industry. With many of Indian companies (other than IT) are making their presence globally, it is time to look into domestic market and slot in your position for future. Idea has given a multi year $80 billion contract to IBM for its IT service management. Why not one of our Indian company? Because while we were trying in US for opportunity, an US company bargained domestic work out of India. Reliance, TATA, ICICI and many others are now global companies and should have a lot of need of IT support. These are nowhere less in revenue than any US or Europe company, so don't underestimate our domestic market. Even SBI could give a fight to any international bank for its customer count and money it handles.
And as I started, this is era of automation. Lame coding is outdated in current time. You need to be sensible to client business and provide a solution which could be mapped to a final income. If you are not thinking in that line, you are not growing up and cannot keep up with new race which is going to begin. So sharpen your skill, look for long term opportunity and make your position to be in front when race starts.
Wish you a happy and prosperous future of 2009. Good luck.
Thursday, January 1, 2009
Major Financial news of 2008
I want to begin New year by summurazing what happened in last year. It will help one to do a better financial planning and take into factor many events which normally people skip and consider as non-related. Below are few major events which happened in India in 2008 and what could be its economical impact -
Mumbai Terror Attack: It is being remembered as 26/11 in line with 9/11 of US attack. Went on for 3 days, leaving at least 173 dead and more than 300 injured. While most serious loss is human lives in this incident, it impacts economy as well. And it is not only Mumbai but a concern for security in whole country. In 2008, hundreds of lives were lost as a series of blasts shook various Indian cities. While short term equity fall and rupee value depreciation was expected, it is not that negative as long term impact. Companies will worry about safety of their employees and establishment and so could impact foreign investment and industry growth. Tourism industry will be impacted for reducing foreign visit to India.
Sunsex: It started with a very promising 21,206. 'Black Monday' (21 Jan) as it is named, is famous for 2000 point fall in Sensex in a single day. And then it touched an unimaginable low 0f 7697 giving heart attack to many traders and even investors' belief was shaken. Trading market rules will be written again after this year and equity is no more a promising product for investors. Mutual funds are even worst performer and loosing faith of their customers.
Crude Oil: Oil price touched a all time high of $147 per barrel in July 11 and it was expected that it is not going to come down. With recession news it came down to <$40 surprising everyone but still not able to help economy to stablize. Inflation: Inflation neared 13% in mid jan while it was normal when year started. Comforting news is that it soothe down to single digit when year ended. Else it was a bouble impact on public to face inflation and economic recssion impact at same time.
Debt relief to Farmers: The Finance Minister, in his Budget Speech for 2008-2009, announced a Debt Waiver and Debt Relief Scheme for farmers. It was amounted to Rs 60,000 Crore.
Nuclear Agreement: Govt made historical civilian deal with US. On August 1, 2008, the IAEA approved the safeguards agreement with India. Us expect to bring $150 billion for nuclear power plan which will help India increasing its electricity production and improvising transportation.
Confidence Vote: In lieu of nuclear deal, govt had to go through confidence voting. Communist parties - Left fron withdrew its support from got on July bringing uncertainty in India. Govt survived with support from SP.
Nano: TATA announced world's cheapest car Nano. It planned to setup production plan in Singur, West Bengal. Later it was forced to move out becuase of opposition from Mamata Benerjee of Trimul Congress. It delayed roll out of car and TATA accepted Gujarat offer of setting production plan in their state. There are news for electric version of Nano as well (e-Nano) which might come up later.
Banks: HDFC Bank and Centurion Bank of Punjab announced their merger, creating India’s largest bank in terms of branches. India’s top private lender ICICI’s share price dipped more than 50 pct on various news of economic recession impact on this bank.
Satyam: IT major Satyam Computer Services faced some tough questions about corporate governance after a botched attempt to buy two of its sister firms for $1.6 billion. It was further impacted by World bank 8 year direct contract ban on company.
Jet Airways Layoff: Jet Airways faced staff ire over efforts to downsize and survive. 1900 employees were asked to go which was after Kingfisher and Jetairways shook hands. It was considered to be impact of this deal. Later Jet Airways chairman offered all employees to join back and keeping survival issue on hold and promised to look into other options for handling it.
Cricket: Cricket changed its shape when IPL was introduced in India in April 2008. The success of the inaugural IPL 20/20 league conceptualized a new business strategy and brought cricket again on top of sports while expanding opportunity in this field multiple times for sportmen. Even other sports are now trying to change how the games are played and increasing revenue.
Ranbaxy: FDA has banned 30 generic drugs made by Indian drug-maker Ranbaxy Labs from import to the US. It impacted one of largest pharmacy of India is big.
Please let me know more major events which are worth mentioning here and I will add those in above list.
Mumbai Terror Attack: It is being remembered as 26/11 in line with 9/11 of US attack. Went on for 3 days, leaving at least 173 dead and more than 300 injured. While most serious loss is human lives in this incident, it impacts economy as well. And it is not only Mumbai but a concern for security in whole country. In 2008, hundreds of lives were lost as a series of blasts shook various Indian cities. While short term equity fall and rupee value depreciation was expected, it is not that negative as long term impact. Companies will worry about safety of their employees and establishment and so could impact foreign investment and industry growth. Tourism industry will be impacted for reducing foreign visit to India.
Sunsex: It started with a very promising 21,206. 'Black Monday' (21 Jan) as it is named, is famous for 2000 point fall in Sensex in a single day. And then it touched an unimaginable low 0f 7697 giving heart attack to many traders and even investors' belief was shaken. Trading market rules will be written again after this year and equity is no more a promising product for investors. Mutual funds are even worst performer and loosing faith of their customers.
Crude Oil: Oil price touched a all time high of $147 per barrel in July 11 and it was expected that it is not going to come down. With recession news it came down to <$40 surprising everyone but still not able to help economy to stablize. Inflation: Inflation neared 13% in mid jan while it was normal when year started. Comforting news is that it soothe down to single digit when year ended. Else it was a bouble impact on public to face inflation and economic recssion impact at same time.
Debt relief to Farmers: The Finance Minister, in his Budget Speech for 2008-2009, announced a Debt Waiver and Debt Relief Scheme for farmers. It was amounted to Rs 60,000 Crore.
Nuclear Agreement: Govt made historical civilian deal with US. On August 1, 2008, the IAEA approved the safeguards agreement with India. Us expect to bring $150 billion for nuclear power plan which will help India increasing its electricity production and improvising transportation.
Confidence Vote: In lieu of nuclear deal, govt had to go through confidence voting. Communist parties - Left fron withdrew its support from got on July bringing uncertainty in India. Govt survived with support from SP.
Nano: TATA announced world's cheapest car Nano. It planned to setup production plan in Singur, West Bengal. Later it was forced to move out becuase of opposition from Mamata Benerjee of Trimul Congress. It delayed roll out of car and TATA accepted Gujarat offer of setting production plan in their state. There are news for electric version of Nano as well (e-Nano) which might come up later.
Banks: HDFC Bank and Centurion Bank of Punjab announced their merger, creating India’s largest bank in terms of branches. India’s top private lender ICICI’s share price dipped more than 50 pct on various news of economic recession impact on this bank.
Satyam: IT major Satyam Computer Services faced some tough questions about corporate governance after a botched attempt to buy two of its sister firms for $1.6 billion. It was further impacted by World bank 8 year direct contract ban on company.
Jet Airways Layoff: Jet Airways faced staff ire over efforts to downsize and survive. 1900 employees were asked to go which was after Kingfisher and Jetairways shook hands. It was considered to be impact of this deal. Later Jet Airways chairman offered all employees to join back and keeping survival issue on hold and promised to look into other options for handling it.
Cricket: Cricket changed its shape when IPL was introduced in India in April 2008. The success of the inaugural IPL 20/20 league conceptualized a new business strategy and brought cricket again on top of sports while expanding opportunity in this field multiple times for sportmen. Even other sports are now trying to change how the games are played and increasing revenue.
Ranbaxy: FDA has banned 30 generic drugs made by Indian drug-maker Ranbaxy Labs from import to the US. It impacted one of largest pharmacy of India is big.
Please let me know more major events which are worth mentioning here and I will add those in above list.
Subscribe to:
Posts (Atom)
